Delivering what the customers want
Published on 14 December 2017
Customer feedback shows that Maersk holds a unique position to drive logistics forward. It confirms the validity of integrating across the Transport & Logistics division and it indicates a desire for even further, differentiated improvement. This prompted Maersk to initiate a needs-based customer segmentation project.
“Maersk should focus on end-to-end logistics. There are still so many opportunities in that space. They should start improving the current setup and make incremental changes, but I definitely also see opportunities for them to venture into new areas.”
The above comment is made by a logistics executive of a globally leading sportswear manufacturer, taken from the more than 1,000 anonymous, in-depth and wide-ranging customer conversations that A.P. Moller - Maersk has carried out over the past few years. In a perfect world, the logistics executive would want to work with one vendor across all transportation needs and use the shared capabilities to optimise the supply chain.
In addition, the executive is looking for transparency: “With USD 400,000 of value in each container, it’s amazing that no one has solved this issue yet.”
The feedback on the improvement potential for container logistics as an industry shows that Maersk holds a unique position to drive logistics forward. On the one hand, it confirms the validity of integrating across the Transport & Logistics division. On the other, it also indicates a desire for even further, differentiated improvement, which has prompted Maersk to initiate a needs-based customer segmentation project.
Starting in Maersk Line, the work has been expanded to cover logistics and hence the potential of the entire Transport & Logistics business.
Looking beyond cost
The feedback shows that all customers want reliability, i.e. a strong network and competitive cost. However, the importance varies when compared to drivers that allow customers to lever logistics as a competitive advantage such as innovation and agility. Thus, the project has identified different segments that can make it easier for the Transport & Logistics division to cater for individual needs.
Any customer requiring logistics will fall into one of the segments. While they can, of course, have specific individual needs, it is expected that serving customers based on differentiated value propositions on a broad scale is a better way to meet their needs and enable them to grow more effectively.
Customers have different needs and in order to win their business we have to meet the needs that are most important to each of the customers.Vincent Clerc, Chief Commercial Officer at Maersk Line
“Delivering these value propositions across the functions at Maersk is a massive change and the journey will take years,” says Vincent Clerc, Chief Commercial Officer (CCO) at Maersk Line.
“However, the first positive signs are emerging. When segmenting based on customers’ needs, the trade-offs required to deliver become much clearer and the entire organisation can align its ambitions to better serve the customers.”
One example is the segment that covers customers within sectors such as fashion, automotives and reefers, for whom reliability and issue resolution are key parameters. Here, the timely arrival of goods to keep an assembly line running or to put a new fashion line into retail shops is the most important thing. Cost comes further down the list.
As a logistics executive of a British multinational retailer noted in the feedback:
“It’s not our focus to get lower cost every year, instead it’s about setting the right price and the best price we can achieve given the market we are in.”
The retailer sees an untapped opportunity in offering expert knowledge and strategic advisory services within container logistics. Ideally, the logistics executive would like to see external partners helping to find new ways of packaging and un-packaging, transporting goods and of sourcing in the right way:
“Like when we started moving wine not in bottles, but in big units and then bottling it at the destination. We are also experimenting with how we pack our garments into containers, and it would be great to learn from external partners and others how to do this better and in a more innovative manner. To me, there are a lot of innovative possibilities available in how we put stuff into containers.”
On the customer's terms. Maersk is determined to deliver more value to its customers through simplifying their supply chains, and by doing that in a differentiated manner, which is built on the needs of a number of segments.
Feedback from a multinational grocery and general merchandise retailer indicates similar needs, including the need for a logistics partner to help simplify their supply chain so that they are ready to meet the ever-changing consumer demands.
As the logistics executive noted: “Shopping habits are changing, and that is a reality we need to look at. People want products within an hour. To deliver, we need to have a highly streamlined and flexible supply chain.”
For these customers, shipping further down the supply chain, aka. last mile, is critical and the data quality is a source of concern. In short, when they ask when their container will arrive customers need to be sure that they will get a reliable answer.
Not all customers are equal
According to Vincent Clerc, CCO at Maersk Line, the recommendations from customers show that Maersk needs to integrate the fact that not all customers are the same into its way of thinking.
“Customers have different needs and in order to win their business we have to meet the needs that are most important to each of the customers,” he says, adding:
“What is really exciting about this segmentation project is that we have the entire company behind it. This is not just a project we’re working on within Maersk Line’s commercial department. Instead, it is a project that the entire organisation is lifting together and will continue to lift in the coming years.